WSJ Exec Named Publisher of the Year -- for Losing $80 Million

In most industries, losing $80 million in a single year will get you fired and, maybe, sued by your shareholders. In the newspaper industry circa 2010, it will get you awards for managerial brilliance.

Editor & Publisher, the weekly trade magazine of the newspaper business, just bestowed its Publisher of the Year award. The recipient is Les Hinton, CEO and publisher of The Wall Street Journal, which is part of News Corp. (NWS). The Journal "is in one of the strongest positions of any newspaper in the country," according to E&P, boasting a growing circulation, a well-established strategy for charging online readers and aggressive expansion plans in its hometown market.

An Envied Shipwreck Survivor

To say a member of the newspaper industry, which just suffered through its worst financial year ever, is in "one of the strongest positions" of its competitive group is like saying a shipwreck survivor is the envy of all his friends because of the particularly large and buoyant piece of timber he's clinging to.

But in the case of the Journal, it's particularly cause for cognitive dissonance. That's because the Journal's aggressive, market-leading posture is only made possible by the willingness of its owner, Rupert Murdoch, to lose tens of millions of dollars on it.

Sure, The New York Times (NYT) downsized its newsroom last year while the Journal was hiring reporters for a new metro section. And sure, the Journal has a content pay system in place, while the Times is still working on it. But the Times made a profit of $21 million, while the Journallost a reported $80 million. Any executive can construct a facade of success if he's free to ignore the bottom line.

The Problem With "Swaggering Bravado"

E&P's editors come close to acknowledging this. The award, they say, isn't just a nod to the Journal's business achievements -- it also honors the Journal for showing a "swaggering bravado too often lacking in newspapers." In other words, they wish more newspaper owners would make like Murdoch and invest in their publications as though the medium weren't on life support.

That's all well and good. But maybe in that case they should rename the award "Newspaper Philanthropist of the Year."